National Minimum Wage Increase April 2020

Published on Sunday 5 January 2020

Please find below the new minimum wage rates from 1st April 2020.

Aged 25+ Aged 21 to 24 18 to 20 16 to 17 Apprentice
£8.72 £8.20 £6.45 £4.55 £4.15

As with all legislation governing payroll, compliance with the National Minimum Wage is the ultimate responsibility of the employer. 

To help with these responsibilities, we currently undertake the following work:

  1. Automatically increase hourly rates to meet the national minimum wage when they are increased in April each year;
  2. Monitor when employees change age bands and increase the hourly rate to comply with minimum wage from the following pay period;
  3. Monitor when 12 months has passed since the start of an apprenticeship (if this information is disclosed to us) to ensure the appropriate rate is being paid to any apprentices over 19 years old.

However, there are other areas that the employer alone will be aware of as part of employee management.

Training

  1. If a worker is asked to do any training that is compulsory for the job, including Maths and English qualifications, then this would be classed as working time for NMW purposes. This would include any associated travelling.
  2. If a worker is asked / requests to pay for a course themselves, this could reduce their earnings for National Minimum Wage purposes, depending on the circumstances.
  3. Any training that is not compulsory for the job and is completed at the employees request rather than the employer can possibly be done in the workers own time, but it is advisable to confirm the arrangement in writing, signed by the employer and the employee in case of query.

Additional Hours

  1. Employers do not have to pay employees for overtime, but if employees do unpaid work, their average pay for the total hours worked must not fall below the National Minimum Wage.     
  2. If an employer requires employees to turn up 5/10 minutes before work starts, this counts as working time. 
  3. Employees should not work more than an average of 48 hours per week unless they agree to this by completing a form to opt out of the Working time Directive.

Taking Time Off In Lieu

If an employee is close to the NMW rate and they ask to bank time worked to take off at a later date, their earnings for their current pay period may fall below National Minimum Wage.  Any time off in lieu should, where possible, occur in the same pay period, but the following pay period at the very latest.

Apprentices

Time spent travelling from work to college during the working day counts as working time as well as their time at college.

Uniform and Other Deductions

  1. If employees are not required to purchase specific clothes for work but have the option to do so or are simply required to wear “smart” clothes this does not reduce their pay for NMW purposes.
  2. If staff are required to wear cloths of a particular colour, e.g. black trousers, this will be treated as a “uniform” for NMW purpose and may bring pay below NMW rates.  This is regardless of whether or not the charge or the uniform is taken directly by the employer from wages or the employees purchase the items themselves.
  3. Where the employee’s written contract requires the worker to make payment in specific circumstances linked to the employees conduct (e.g. failure to return company property such as uniform or equipment when employment ends) such deductions are not treated as taking pay below national minimum wage.

Volunteers

  1. Volunteers are exempt from National Minimum Wage provided they do not receive any monetary payment, other than the reimbursement of basic expenses, eg.  travel, refreshments, or items needed for work. 
  2. To establish whether they are a genuine volunteer, some questions to ask are:
    1. Do they have to turn up?
    1. Do sanctions apply if they fail to do so (such as your grievance and disciplinary policies)?

Please find below a link to the most recent guidance published by BEIS.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/835794/calculating-minimum-wage-guidance-april-2019.pdf